Pay-TV strategies must adapt to market changes

Thursday 24 Nov 2011
Changes in market conditions and consumer behaviour are forcing dramatic shifts in the pay-TV industry, according to research group Ovum.

The independent telecoms analyst firm states in a report that new technologies and players which offer alternative ways to view video are undermining the established order of pay-TV operations.

The study also indicates that pay-TV subscriber growth is slowing in several markets, with free-to-air digital TV and web-based offerings luring consumers away from traditional pay-TV services.

Jonathan Doran, Ovum principal analyst said: “While these changes have already started to occur, their impact will become increasingly pronounced over the next five years. This will force a shift in the strategic approaches of pay-TV operators … to ensure their continued success and survival.

“Many operators have been able to fight these threats by rapidly adapting and turning challenges to their advantage.

“However, when combined, these disruptive factors represent an evolution in the TV market landscape that cannot be reversed.”

The firm advises operators to review content packaging. Mr Doran said: “To offset the increasing homogeneity of TV offerings, operators must adapt their portfolios through creative and shrewd packaging and pricing initiatives.

“Service providers will need to continually review and revise their content offerings in order to accommodate consumers’ evolving and increasingly fragmented preferences.”

The report also advises players to exploit triple-play opportunities, employ new user-experience enhancements, and outdo the competition.

Mr Doran added: “As subscription-free alternatives from adjacent players improve in range, quality, and user experience, pay-TV providers will have to work harder to attract and retain customers.”